Increased foreign demand for crops could mean fewer jobs

With U.S. trade relations making headlines, a division of the U.S. Department of Agriculture says that a boost in foreign demand for farm exports could actually cost Illinois jobs.

The USDA’s Economic Research Service says that a 10 percent boost in demand for agricultural exports would not only boost farm-related job numbers in rural areas, but also create jobs in cities as well. In Illinois, the report shows 1,040 additional jobs created.

“It’s not a massive jobs program but you can see it bumps agri-food employment up by about a half of a percent,” ERS Economist Tom Hertz said.

But a boost in demand for farm-food exports actually would mean a net loss of hundreds of jobs, according to the report. Hertz said this could occur if higher foreign demand for agricultural products led to a strengthening of the dollar, making other Illinois exports less competitive.

“If foreign demand increases for our products, that’s going to tend to push the dollar up,” he said. “It’s great for the people whose products are in demand, namely farmers and food manufacturers, but it’s tough on exporters of other things.”

Illinois would be in line for a net loss of nearly 500 jobs from a boost in ag-sector exports. Other states would gain thousands. California would be the big winner, estimated to gain more than 17,000 jobs. The disparity comes from the relative cost and labor needed to grow local crops, Hertz said.

The job numbers in Illinois’ agricultural industry are low compared to other states because staple products like corn and beans are easily farmed with machinery, not a large workforce. USDA estimates Illinois exported $8 billion in agricultural products in 2015.

–Illinois News Network

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